Statistical Uncertainty in the Medicare Shared Savings Program

Title: Statistical Uncertainty in the Medicare Shared Savings Program

First Author: DeLia, Derek

Date of Article: 2012 Q4

Full Title: Statistical Uncertainty in the Medicare Shared Savings Program

Other Authors: Donald Hoover,  Joel C. Cantor

Volume: 2012

Issue: Q4

Summary: According to analysis reported in “Statistical Uncertainty in the Medicare Shared Savings Program” published in Volume 2, Issue 4 of the Medicare & Medicaid Research Review, the role of random fluctuations in year-to-year healthcare spending may play a larger role in savings measurement than previously anticipated. Although CMS is fairly well protected from the chance that an Accountable Care Organization (ACO) would be rewarded inappropriately for savings that did not truly occur, ACOs are much less protected from the analogous chance that they are inappropriately denied rewards for savings that do occur. Smaller ACOs are especially vulnerable to the chance of being inappropriately denied credit for achieved savings. The article concludes with a discussion of strategies that can be used to anticipate and minimize the role of chance variation in ACO savings measurement.

Keywords: Medicare, Econometrics, Health Care Organizations and Systems, Health Economics, Health Policy / Politics / Law / Regulation, Incentives in Health Care, Payment Systems: FFS / Capitation / RBRVS / DRGs / Risk Adjusted Payments etc., Health Care Costs, Health Care Financing / Insurance / Premiums

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